Breaking the Arctic ice - Keppel Corporation

8 Business
Delivering consistent growth
Despite challenging business conditions, Keppel Corporation continued to
perform and sustained its earnings growth for 9M 2008. Keppelite reproduces
Senior Executive Director and Group Finance Director Mr Teo Soon Hoe’s speech
during the results webcast on 23 October 2008.
FINANCIAL
ACHIEVEMENTS AND
HIGHLIGHTS
The Group achieved a record
PATMI of $834 million for the
first nine months of 2008,
which was an increase of
10% over the same period
last year.
EPS was 52.4 cents for the
nine months and annualised
ROE was 21.5%. EVA was
$27 million higher to reach
$614 million, surpassing total
EVA for FY 2007. Free
cashflow was robust at
$1.5 billion for the period.
This has lowered the Group’s
gearing to 3%. We are
virtually debt-free.
Revenue was 14% higher at
$8.1 billion as compared to
9M 2007. Operating profit
Keppelite I November 2008
rose by 8% because of a
higher mix of Infrastructure
revenue. Profit before tax
increased at a lower rate
of 6% due to reduced
share of associated profits
from Singapore Petroleum
Company (SPC).
Growth in PATMI was 10%
as a result of lower tax and
minority interest for the first
nine months in 2008.
SEGMENTAL
PERFORMANCE
Total revenue of $8.1 billion
for the nine months
increased by almost
$1 billion. Revenue from
Offshore & Marine increased
by 11% over the same
period last year and
accounted for 69% of total
revenue.
With a prudent and measured approach, Keppel expects to stay on course for consistent
earnings growth
The Infrastructure Division
contributed 22% to Group
revenue. Its revenue
increased by nearly three
times the level achieved in
9M 2007. Revenue for
Property fell by almost 50%
to $722 million because of
lower residential sales.
Offshore & Marine, making
up 60% of the Group’s
PATMI, chalked up 18%
more profits for 9M 2008.
Property registered a dip in
profits due to lower profit
recognition as a result of
fewer residential units sold,
compared to 9M 2007.
Infrastructure’s profits more
than doubled that of 9M
2007. Investment recorded
increased profits despite
lower contribution from SPC,
due to higher investment
income and share of k1
Venture’s gain on the sale of
its investment.
CONSISTENT GROWTH
Both PATMI and EPS were on
rising trends as compared to
the corresponding periods
last year.
EVA for the quarter was
$218 million bringing EVA
for the nine months to
$614 million. This increase
has resulted in the 9M EVA
outperforming the prior full
year’s EVA of $604 million.
We have doubled our ROE in
seven years; from 10% in
2001 to 21% in 2007. We
shall continue to work hard
to maintain ROE above 20%
with low gearing.
The Infrastructure Division continues to make good progress in building its track record